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Insurance surcharges will fund most online exchanges created under health law

Kaiser Health News, December 3, 2012

Republican governors in Florida, Virginia, Texas and several other states say they're reluctant to build the online insurance markets required by the federal health law because they're worried about getting stuck with the bills. But Democrat-controlled California, which will run the country's largest insurance market, will do so without taking a cent from the state treasury. Instead, operations of the market, also called an exchange, will be financed by a surcharge on the billions of dollars in insurance premiums sold in the exchange. That’s the same way most state-based exchanges will be funded, according to government officials and health consultants working with states.